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Export Processing Zones

Export Processing Zones (EPZ’s) are detrimental in a corporations decision to outsource in developing countries. For example in the Philippines the EPZ’s exist within a legal set of brackets that is exempt from any interference by the police and municipal government, in this case the EPZ’s become cordoned off in their own world and become hosts within their own countries. The whole idea of having Export Processing Zones within a country could be argued to stem from the neoliberalism ideology, as it is this ideology that stresses the importance of having international organisations such as the IMF and world bank and these institutions are avid supporters of having Foreign Direct investments in developing nations, however this whole system is flawed. To begin with companies such as Nike are lured into manufacturing in these countries because they often offer them a 5 year tax free incentive, the idea being that after 5 years Nike will begin to pay tax for the exports and the companies economy will steadily grow, however an interview with the Mayor of Rosario, Philippines and social activist Naomi Klein showed that this was not the case as he said that many companies ‘fold up before the tax holiday expires, then they incorporate to another company, just to avoid payment of taxes.”. Additionally the wages that Nike workers are paid in the EPZ’s does not even cover the cost of their daily allowances so the idea that the money the workers earn within the EPZ’s will be injected into the economy is deceitful, especially as the bid to win over the big multinational corporations become more and more competitive as it is the workers wage that is squeezed in a bid to cut their costs.